The politics and economics of cross-border electricity infrastructure: A framework for analysis

A common European electricity market requires both market integration and transmission grid expansion, including cross-border interconnectors. Although the benefits of increased interconnectivity are widely acknowledged, expansion of interconnectors is often very slow. What are the reasons behind this "grid-lock"? To date, the issue remains discussed largely from the perspective of practitioners. Academic research on interconnectors comes mostly from the discipline of energy economics, offering models that do not necessarily help us explain the dynamic situation in the EU. This paper sketches the problem and its scale, reviews existing approaches and proposes a framework for analysis of interconnector projects, including a set of hypotheses that could account for the stall in interconnector development. The hypotheses relate to inadequate financing, diverging interests, governance and administration problems, as well as political discourses and perceptions. As empirical illustration we use the case of the German-Polish border. Drawing on document analysis and stakeholder interviews, we evaluate the hypotheses. Evidence suggests that at this stage, political and governance-related issues rather than economics and finances might explain the "grid-lock" we are facing. The concluding section sums up the findings, highlights methodological difficulties and gaps, and proposes directions for further social scientific research in this issue area.